VEHICLE DONATION PROGRAMS

Due to the fund raising efficacy of car donation programs, we have witnessed the proliferation of many unscrupulously expedient organizations; hence we believe it would be wise for you to adhere to IRS dispositions and other useful facts on vehicle donation programs, as well.

First and foremost, you should know that there are various types of vehicle donation programs with their respective influence on tax-exempt status and tax-deductible contributions,which we provide as follows:

When a Charity Uses or Distributes Vehicles: Donations are strictly distributed only to the needy. If all requirements are met, donors should have no problems in claiming this type of deduction.

When a Charity Sells Donated Vehicles: Donations are sold through auctions, and proceeds funneled towards the charitable program of choice. If all requirements are met, donors should have no problems in claiming this type of deduction.

When a Charity Hires an Agent to Operate Vehicle Donation Programs: Charities hire privately operated businesses who, as for-profit entities, act on their behalf in raising funds by way of vehicle donation programs. By all means, the agency receives a fee for its services; however, it is somewhat restricted in its operations because the charity must overlook every move, and has final say in any transaction the agency may perform. If all requirements are met, as well as guidelines duly followed, donors should have no problems in claiming this type of deduction.

When a For-Profit Entity Receives and Sells Vehicles Using a Charity’s Name: Charities basically lease their name for a flat fee. They are not in control of the for-profit organization’s operations; therefore, all donations are not considered charitable by the IRS, since they are not made to a charity; and they’re not subject to the charity’s tax exemptions, nor tax-deductible claims. If by any chance, such deductibility claims were advertised, then the charity and the for-profit entity may be liable to adverse actions by the IRS.